Functional MRI (fMRI) permits evaluation of distributed brain systems that encode incoming stimuli. It offers anatomic localization of neural activation, complementing the temporal resolution of electrophysiology. Most fMRI studies in schizophrenia have focused on fronto-temporal "executive" systems. However, evidence from the current CCNMD studies, consistent with an extensive ERP and a growing fMRI literature, indicate impaired activation and deficits in early stages of stimulus encoding. Current studies, and data from Project I, suggest abnormal alterations in gamma oscillations in schizophrenia, most consistently for induced gamma. Such abnormalities implicate deficits in coordinating activity in multiple regions that use phase locked gamma frequency oscillations. Gamma oscillations have lately been linked to hemodynamic signal changes in both the visual and the auditory modalities. The proposed project will combine homologous visual and auditory paradigms, in parallel with electrophysiology (Project I), to investigate early stages of stimulus encoding, focusing on integration. The dimensions of stimulus modality, the required integration (spatial, temporal or both), and the nature of controlled-processing demands (top-down vs. bottom-up), will be systematically manipulated. We will use event-related designs, in a high-field scanner (3 Tesla), to model the hemodynamic response for each stimulus class. Another new direction in the project will build on our genetic studies in schizophrenia. We have established that neurocognitive measures are potential endophenotypic markers of vulnerability present in unaffected family members. The sample will include 80 patients with schizophrenia, 80 first-degree unaffected family members and 80 unrelated healthy people. The CCNMD hypothesis will be tested by implementing a cascade of fMRI studies that capitalize on the complementarity between electrophysiology and fMRI. Parallel studies will be performed within the auditory and visual modalities and each participant will undergo both sensory conditions as well as the electrophysiologic studies described in subproject 0001. The cascade will trace the stages of information processing from stimulus deviance and novelty detection through encoding using adaptation to fMRI of standard electrophysiologic tasks that have been associated with specific components of the ERP. The neurobehavioral probes will examine regional activation induced by target detection, response to novelty and recognition memory. Physiological activity will be measured with the BOLD paradigm using event-related contrasts to help establish the stage of information processing in the cortico-thalamic network where patients show abnormal activation. Magnitude and spatial extent of activation will be related to: a. on-line performance for tasks requiring response, with both accuracy and reaction time available, b. Basal neurocognitive computerized measures obtained by Core A, which yield estimates of accuracy and speed for eight neurocognitive domains;c. clinical parameters assessed by Core A, which provide measures of symptoms, functioning and course. The targeted sampling by DTNBP1, NRG1 and RGS4 will permit linking activation abnormalities to vulnerability haplotype.